Current through Register Vol. 56, No. 6, March
18, 2024
(a) A captive
that intends to be formed and licensed to do business in any of the lines of
insurance authorized by
17:47B-1 et seq., shall submit the
following to the Department, as applicable:
1. A captive application for admission (form
can be found on the Department's website at
http://www.state.nj.us/dobi/division_insurance/captive/app_formation.htm).
The application requests the name of the proposed captive, the type of captive,
the parent, the directors, capital and surplus information and the names and
addresses of professional service providers;
2. The appropriate costs for license
application review as set forth in
11:28-1.5;
3. An irrevocable letter of credit (a sample
of which can be found on the Department's website at the address indicated
above);
4. A detailed business plan
(form outline can be found on the Department's website at the address indicated
above);
5. Biographical affidavits
(form can be found on the Department's website at the above address) - one for
each incorporator, officer, and director of a corporate applicant or each
manager and member owning a 10 percent or greater interest in a L.L.C.
applicant;
6. Designee to receive
Department documents (form can be found on the Department's website at the
above address);
7. Designee for
Receipt of Service of Process in accordance with N.J.S.A. 17:47B-2b.(4) (which
form can be found on the Department's website at the above address);
8. Bylaws;
9. Articles of incorporation or the
equivalent for non-corporate forms of business;
10. Pro forma financial projections
(five-year expected and five-year adverse);
11. Actuarial feasibility study;
12. Statement of benefit to New
Jersey;
13. Minimum capital and
surplus guidelines;
14. As required
pursuant to
17:47B-1 et seq.:
i. A statement under oath of its president
and secretary showing its financial condition;
ii. A description of coverage limits and
rates together with any additional information as the Commissioner may
reasonably require. In the event of any subsequent material change in an item
in the description, the captive insurance company shall submit to the
Commissioner for approval an appropriate revision and shall not offer any
additional lines of insurance until a revision of the description is approved
by the Commissioner. The captive shall notify the Department of any proposed
material change not later than 30 days prior to the effective date of the
adoption of any such change; and
iii. Documents evidencing the following:
(1) The amount and liquidity of its assets
relative to the risks to be assumed;
(2) The adequacy of the expertise, experience
and character of the person who will manage it;
(3) The overall soundness of its plan of
operation; and
(4) The adequacy of
the loss prevention programs of its insureds (only applicable to property
casualty); and
15. Statement of net worth.
(b) The Commissioner in his or her
discretion may request alternative and additional documents and information as
he or she deems necessary in order to make a finding that the application
submissions demonstrate that: "the establishment and maintenance of the
proposed captive will promote the general good of the State" pursuant to
N.J.S.A. 17:47B-5d; or that the applicant sufficiently meets the financial
requirements necessary for admission in this State as a captive insurance
company. Information contained in any submissions made as set forth in this
subsection or in (a) above that is specified in N.J.S.A. 17:47B-2c.(3) shall
remain confidential as set forth therein.
(c) A captive shall not write any insurance
business in this State unless, in accordance with N.J.S.A. 17:47B-2b.(3), it
maintains its principal place of business in this State, which may be the New
Jersey office of the captive insurer's manager, and utilizes an appropriate
number of in-State professional service providers to carry out the business of
the captive, including, but not limited to, attorneys, accountants, managers,
actuaries, and, if applicable, brokers and third party
administrators.
